In some instances, individuals were considering bankruptcy as an alternative to paying the tax, introduced by Donald Trump, which can be paid over eight years or in a lump sum if the first payment is missed.
On Monday, the Internal Revenue Service issued guidance stating tax payers have another year if their net tax liabilities are less than $1m (£750,000, €850,000).
The hope is now that the tax can be amended to avoid catching individuals. Campaign group American Citizens Abroad (ACA) has pressed US law makers to introduce a ‘de minimis ruling‘, which would remove small taxpayers from the scope of the tax.
“It is frankly ridiculous…they should not be put through the same wringer as the largest US multinational corporations, making the same calculations and completing and filing exactly the same form”, said Charles Bruce, legal counsel, ACA.
ACA has also campaigned for US tax to be paid on the basis of residency rather than citizenship.